October 18, 2007

Real-Time Interaction and Changes in TV Viewing Habits Require New Strategies for Broadcasters and Advertisers

LiveHive Systems™ Co-Founder cites realities of the TV business

OCTOBER 18, 2007 -  WATERLOO, ONTARIO:  Television is now going through a profound reinvention as new technologies, coupled with the changing demands of viewers, means that advertisers and broadcasters must adapt to new realities and new ways of doing business. This is the challenge facing players in the industry today, according to Robert Riopelle, Co-Founder and Vice President of Business Development for LiveHive™ Systems.

In yesterday's webinar called, "The Changing TV Viewer and the Implications," Riopelle took online attendees on a trip through the evolution of television, from the 1950s where viewing was a social event for families, to today, where individuals can watch anything, anywhere, anytime.

"Today people have power and choice," said Riopelle. "Viewers want what they want, when they want it. They want to interact and be more engaged in programming. With the advent of such technologies as Digital Video Recorders and YouTube, people are demanding customizability, control, and interaction. Technology, working in combination with changing consumer needs, is pushing broadcasters to reinvent a system that has been in place for over 50 years."

Riopelle said the key technology drivers in the industry today include niche programming, DVR usage, online streaming of shows, and media multi-tasking, such as surfing the internet while watching TV. All this, he said, has led to a new type of TV viewer who spreads viewing time across many channels, and watches TV around their own personal schedule. This latter point, said Riopelle, means viewers can easily skip commercials, threatening the 30-second commercial spot, which traditionally has funded our favorite shows.

"According to research, as the adoption of DVRs increases, lost ad revenue could reach US $18 billion by 2009," Riopelle said. "TV has traditionally been based on ad revenue from commercials. But viewer erosion resulting from DVRs and from content being available online has hastened the need for new business models for networks. They need a new revenue model that offers viewers real-time interaction with programming and that monetizes web properties. This is the next generation in TV viewing."

Riopelle outlined the tangible benefits of real-time interaction with programming:

• eliminates ad skipping
• enhances the viewing experience
• gains loyalty from fickle TV audiences
• meets the media multi-tasking desires of modern viewers.

How do viewers interact? Riopelle said LiveHive has shown in recent months that viewers can interact with everything from live sports events to reality TV shows. Viewers can make real-time predictions about plays in a football or baseball game, answer trivia questions, and respond to questions involving instant recall in shows like American Idol (i.e., 'What did the judge say about the last contestant's performance?'). There is also the opportunity for "live social interaction" with real-time chat and polling, meaning viewers can belong to an online community of fans with similar interests. And the whole experience is made possible through corporate sponsors.

"Real-time interactive technology offers an optimal end-user experience," said Riopelle. "There are no downloads, so it's user-friendly. It enhances the experience by offering competition, tournaments, and prizes for viewers. It allows for scalability and customizability. And it provides a variety of sponsorship opportunities for advertisers, as well as measurable results."

Riopelle concluded the Webinar by citing some of LiveHive's own successes this year with its product NanoGaming(TM). These include: a game called PlayCaller in partnership with corporate sponsor Lexus and ESPN NFL football telecasts on Monday nights; MLB.com's Live Game Trivia Challenge in partnership with Turner Broadcasting for baseball telecasts; and the reality TV show Big Brother 8 'In The House' in partnership with the Global Television Network.

NanoGaming provides value for players, broadcasters, and advertisers. It provides non-stop, real-time interaction for players, making the sporting event or reality show even more interesting. It helps broadcasters increase their dedicated viewership, convert passive viewers into active participants, and drive fans to their website during a broadcast. NanoGaming also provides the ideal platform for advertisers who seek to leverage new interactive media channels.

About LiveHive Systems Inc.

LiveHive Systems is a privately held software development company that specializes in two-screen, interactive technology for TV broadcasters, fantasy sports sites, and web portals looking to differentiate their offering and increase value to viewers, advertisers and stakeholders. Its flagship product, NanoGaming is a technology platform that powers viewer interaction with entertainment media, such as live television broadcasts and streaming video. It gives audience members a continuous and engaging way to accumulate points, play with friends, and win prizes.

LiveHive provides software, integration, joint marketing initiatives, and a 24-hour Broadcast Control Center, which supports the comprehensive NanoGaming schedule. LiveHive Systems is based in Waterloo, Ontario, which was recently named the world's top intelligent community by the New York-based Intelligent Communities Forum.

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